Sullivan v. Newsome, (1987) 78 A.R. 297 (CA)

• Judge: Lieberman, Haddad and Irving, JJ.A.
• Court: Court of Appeal (Alberta)
• Case Date: May 22, 1987
• Citations: (1987), 78 A.R. 297 (CA);1987 ABCA 102;38 DLR (4th) 1;52 Alta LR (2d) 304;78 AR 297

Sullivan v. Newsome (1987), 78 A.R. 297 (CA)

MLB headnote and full text

David Charles Newsome and Madeline Marian Newsome (appellants) v. Arthur H. Sullivan (respondent)

(Appeal No. 17275)

Indexed As: Sullivan v. Newsome

Alberta Court of Appeal

Lieberman, Haddad and Irving, JJ.A.

May 22, 1987.

Summary:

Sullivan sold a lot of land to purchasers who agreed to reconvey part of the lot to Sullivan if the city should ever permit a subdivision of the land. Sullivan filed a caveat to protect his interest. The purchasers sold the lot to the Newsomes, who knew of the agreement but refused to be bound by it. Sullivan applied for a determination of his interest.

The Alberta Court of Queen's Bench, in a judgment reported 58 A.R. 205, held that Sullivan had a beneficial interest in the lot by which the Newsomes were bound as trustees on a resulting trust in Sullivan's favour. The Newsomes appealed.

The Alberta Court of Appeal allowed the appeal and held that Sullivan had no interest in the land. The court held that if the original sale was interpreted as a sale of one-half of the lot with an option back the agreement offended s. 88(1) of the Land Titles Act and s. 23 of the Planning Act. The court also stated that if the agreement was for the sale of the entire lot with an option back to Sullivan the option offended the rule against perpetuities. The court held that even if a resulting trust arose, it would have the effect of subdividing the land and would therefore be unlawful.

Contracts - Topic 2065

Terms - Implied terms - To achieve business efficacy - The Alberta Court of Appeal stated that a court should be cautious in implying terms into a written contract in order to give it business efficacy - See paragraph 20.

Land Regulation - Topic 2709

Land use control - Subdivision control - Subdivision approval - Effect of failure to obtain - A sale of a lot with an option back to the vendor to repurchase a portion of the lot was interpreted as being a sale of one-half of the lot - The Alberta Court of Appeal held that assuming such interpretation was correct, the sale offended s. 88(1) of the Land Titles Act and s. 23 of the Planning Act, because the sale would constitute a subdivision of land not in accordance with the two statutes - See paragraphs 16 to 28.

Perpetuities - Topic 708

Rule against perpetuities - Application of rule in general - Contingent interests - The Alberta Court of Appeal held that the sale of a lot of land with an option back to the vendor to purchase a portion of the lot should the city ever permit subdivision of the lot, offended the rule against perpetuities, because the option might be exercised beyond the perpetuity period - See paragraphs 29 to 33.

Trusts - Topic 1901

Resulting trusts - General - The plaintiff sold a lot of land to purchasers who agreed to reconvey part of the lot to the plaintiff if the city ever permitted subdivision of the land - The Alberta Court of Appeal held that assuming the plaintiff had a beneficial interest in the lot by which the defendants were bound as trustees on a resulting trust, the trust would be unlawful where it had the effect of subdividing the land contrary to the Land Titles Act and the Planning Act - See paragraphs 34 and 35.

Cases Noticed:

Calgary Hardwood and Veneer Ltd. v. C.N.R., [1977] 4 W.W.R. 18; 5 A.R. 582, affd. [1979] 4 W.W.R. 198; 16 A.R. 52 (C.A.), refd to. [para. 17].

Anderson v. Sinclair et al. & Cooke, [1977] 2 W.W.R. 475, refd to. [para. 17].

Hyder v. Edgar (1980), 19 A.R. 579; 10 Alta. L.R.(2d) 17, refd to. [para. 17].

Hands v. Sutherland (1976), 66 D.L.R.(3d) 40, refd to. [para. 18].

Dynamic Transport Ltd. v. O.K. Detailing Ltd. (1978), 20 N.R. 500; 9 A.R. 308; 6 Alta. L.R.(2d) 201; 85 D.L.R.(3d) 19 (S.C.C.), dist. [para. 18].

Canadian Long Island Petroleums & Another v. Irving Industries Ltd., [1974] 6 W.W.R. 385; 3 N.R. 430 (S.C.C.), refd to. [para. 19].

G. Ford Homes Ltd. v. Draft Masonary (York) Co. Ltd. (1984), 43 O.R.(2d) 401, refd to. [para. 20].

Wensel v. Wensel, [1977] 1 W.W.R. 32; 5 A.R. 379, refd to. [para. 23].

Otan Developments Ltd. v. Kuropatwa (1978), 12 A.R. 15; 7 Alta. L.R.(2d) 274 (C.A.), refd to. [para. 24].

Knowlton v. Registrar of Land Titles (1982), 37 A.R. 502; 19 Alta. L.R.(2d) 31, refd to. [para. 25].

Robinson v. Guthrie (1984), 51 A.R. 356; 30 Alta. L.R. 280 (C.A.), refd to. [para. 26].

Politzer v. Metropolitan Homes Ltd., [1975] 5 W.W.R. 492; 3 N.R. 621 (S.C.C.), refd to. [para. 32].

Sorochan v. Sorochan (1986), 69 N.R. 81; 74 A.R. 67; 46 Alta. L.R.(2d) 97 (S.C.C.), refd to. [para. 35].

Statutes Noticed:

Land Titles Act, R.S.A. 1955, c. 170, sect. 88 [para. 16].

Planning Act, S.A. 1963, c. 43, sect. 2(m), sect. 3, sect. 23 [para. 22].

Perpetuities Act, S.A. 1972, c. 121, sect. 2, sect. 25 [para. 31].

Authors and Works Noticed:

Fridman, The Law of Contracts (2nd Ed. 1986), pp. 449-454 [para. 20].

Chitty on Contracts (25th Ed. 1983), pp. 451-454 [para. 20].

Waters, The Law of Trusts in Canada (2nd Ed. 1984), p. 24 [para. 34].

Counsel:

S. Carscallen and K. Haywood, for the appellants;

J.P. Peacock, Q.C., for the respondent.

This appeal was heard before Lieberman, Haddad and Irving, JJ.A., of the Alberta Court of Appeal.

On May 22, 1987, Lieberman, J.A., delivered the following judgment for the Court of Appeal.